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Wall Street Kicks Off 2Q on a High Note as Traders Cheer ISM Data

After posting the best first quarter in more than a decade, the markets continued on their upward march as a strong reading on the U.S. manufacturing sector reinforced traders' bullish sentiment.

Today's Markets

The Dow Jones Industrial Average climbed 52.5 points, or 0.4%, to 13264, the S&P 500 rose 10.4 points, or 0.74%, to 1419 and the Nasdaq Composite gained 28.1 points, or 0.91%, to 3120.

The energy and basic materials sectors posted the best performance on the day on the back of a strong showing in futures markets. Consumer staples, financials and technology companies performed well too, with the former hitting an all-time high as tracked by the Consumer Staples Select Sector SPDR (XLP).

The global economy is expected to take the spotlight during the holiday-shortened trading week, with key reports on tap every day leading up to the monthly employment report from the Labor Department.

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The Institute for Supply Management's closely-followed gauge of U.S. manufacturing activity rose to 53.4 in March from 52.4 in February, suggesting the sector is expanding at a quicker pace. Meanwhile, U.S. construction spending slid 1.1% in February from the month prior, the biggest fall since July 2011. Economists expected an increase of 0.6%.

"This may not be a boom, but it is a broad-based manufacturing expansion, with fifteen of eighteen industries reporting growth," IHS Global Insight Chief U.S. Economist Nigel Gault wrote in a research note following the report.

Commodities were sharply to the upside after the strong ISM report lifted traders' outlook on demand for crude. Oil traded in New York jumped $2.21, or 2.2%, to $105.23 a barrel. Wholesale New York Harbor gasoline rallied 2.2% to $3.382 a gallon.

In metals, gold gained $7.80, or 0.47%, to $1,680 a troy ounce.

Manufacturing activity in China unexpectedly picked up steam in March from the month prior, official data released on Monday showed. The report helped ease tensions that the world's No. 2 economy may be in for a "hard landing." Still, the optimism was tempered by a private survey from HSBC that showed a weakening in the sector. Economists said the official data tend to get a positive uplift from seasonal factors, making it particularly challenging to interpret.

Meanwhile, manufacturing in the eurozone contracted for the eight month in a row in March, according to a closely-followed survey by Markit. The data showed the 17-member currency bloc's two biggest economies weakening for the month. Germany saw its first drop of 2012, while activity in France shrunk at its swiftest pace since June 2009.

“Eurozone manufacturers suffered a miserable March, with a renewed downturn in production wiping out marginal gains seen in the first two months of the year," Markit Chief Economist Chris Williamson said in a statement. "Prospects for April also look poor, with companies reporting steeper rates of decline for both new orders and backlogs of work."

Corporate News

Coty offered to buy Avon Products (AVP) for $23.25 a share, or $10 billion, which represents a roughly 20% premium on the cosmetic seller's closing price last week.

Foreign Markets

European blue jumped fell 0.96%, the English FTSE 100 soared 1.9% to 5875 and the German DAX rallied 1.6% to 7057.

In Asia, the Japanese Nikkei 225 edged higher by 0.26% to 10110 and the Chinese Hang Seng slumped 0.16% to 20522.